UPS’ Happy Returns is testing AI tools to curb a growing form of returns fraud as post-holiday volumes surge. Here's what you need to know:
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UPS’s Happy Returns is piloting AI-powered fraud prevention tools, including Return Vision, with select retailers such as Everlane.
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The system assigns risk scores to returns based on shopper behavior and flags high-risk cases for review before refunds are issued, focusing on timing and frequency patterns.
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Return Vision uses AI to compare returned items with retailer catalog images to detect decoy returns, where shoppers send back cheaper lookalike products instead of the original purchase.
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About 9% of all returns are fraudulent, according to a 2025 report from Happy Returns and the National Retail Federation, with decoy returns rising in prevalence.
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Less than 1% of returns are flagged for review, yet retailers prevent an average of $218 in loss per flagged item; Happy Returns plans a broader rollout of Return Vision in 2026.
Charm Data on the DTC Brand Everlane
Below, we've provided key metrics on the brand, Everlane, including the location distribution of their audience.
Everlane
Charm Growth Score: 82.59
Charm Success Score: 99.70
Fastest-Growing Channel: Facebook
Audience Demographic Skew: Female, age 25-34
A fashion brand committed to radical transparency, offering ethically-produced essentials like clothing, shoes, and accessories.
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